John McLellan: Hospitality university could be cash cow for city

EICC''22nd May 2014, Edinburgh, UK. Edinburgh International Conference Center general view. Credit Steven Scott Taylor.
EICC''22nd May 2014, Edinburgh, UK. Edinburgh International Conference Center general view. Credit Steven Scott Taylor.
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Some months ago I wrote about the exciting prospect of a hospitality university in the Exchange District, a combination of the Edinburgh International Conference Centre, Napier University and a new hotel to be built as part of the Exchange 2 expansion on Dewar Place.

Unfortunately, the developer Duddingston House Properties (DHP) and the EICC could not reach agreement and the plan fell apart, leaving the council-owned EICC and Napier to find another solution and DHP a hotel operator.

Construction problems were cited, but part of the problem was the EICC wanted to control room availability to guarantee competitive rates for conference delegates, but that made the hotel less attractive for a prospective operator and reduced the deal price for the developer. The EICC board decided to go it alone and last week presented a report to councillors outlining a plan to build a 400-bed hotel on council-owned land along the road at India Quay.

The EICC claims the hotel and hospitality school would generate £3 million extra revenue, provide an annual dividend of around £3.4m for the city council and give the city an asset instantly worth £30m. It would, says the EICC, fund the conference centre’s future maintenance costs, produce over £11m of additional wider economic impact and put the city on the map as a world centre of excellence in training and education for the hospitality industry.

The drawback is that the council would need to borrow £50m to build it and ditch alternative proposals to build offices and business units on the same site. At the same time, the Fountainbridge Canalside Initiative pressure group is lobbying for the hotel idea to be dumped in favour of community cafes and social spaces.

READ MORE: John McLellan: Why Edinburgh needs a new rail station

Muddying the waters is the fact that several hotels have recently sprung up nearby, including the Hampton by Hilton and Mercure, eventually to be joined by the 260-bed Moxy on the neighbouring Vastint site, so the perception is the area will suffer from an over-provision of hotels, although in living memory the site has only been a brewery or derelict.

From an economic point of view, there should be no argument that in generating an estimated £55m a year in wider economic benefits, the EICC business does not just need to be protected but developed if Edinburgh is to remain competitive in the international conference market.

There is, however, a counter view that the EICC just needs to tick over and keep in profit, and that control of accommodation is unnecessary for it to achieve its primary aims. But that’s based on what the EICC is now, rather than maximising its potential.

At risk of being accused of treachery, I’ve recently been involved in trying to attract an international news and journalism congress to Glasgow.

READ MORE: John McLellan: Exposed: A municipal murder plot

It’s a complicated business in which the requirements for conference and social space, an attractive location, transport links, hotel availability and financial support all need to come together on suitable dates.

To address the first of these requirements, Edinburgh council invested in the Lennox Suite which opened in 2013, funded by the sale of the Atrium offices above for £105m two years later. The city always scores on the second, does pretty well on transport but has a fight on its hands with the last two. What the EICC proposes is a means to tackle them both.

Members of the council’s housing and economy committee, which includes me, will debate the issue today, after which at the very least I hope options will remain very much open.

<blob> The sale of the Haymarket site for £50m to M&G Real Estate has led to speculation that the whole masterplan could be redrawn. The new owner may well make some changes, but not to the basic footprint because the extensive strengthening of the railway tunnels was engineered to match.

The benefits of disagreement

Much has been made of my group’s opposition to the plans for a tourist tax in Edinburgh, as if the administration’s ideas are anything like a workable scheme.

Two fundamental and substantial hurdles remain: firstly the Scottish Government is opposed and secondly there is absolutely no guarantee Edinburgh will see any benefit if it ever changed its mind. The city could easily hobble the tourism trade, the money sucked into the black hole of public finances with no noticeable improvements to services or council tax reduction. Even our opponents concede the debate has flushed out some difficulties, so thank goodness for disagreement.

Haunted by the ghost of trams past

Scottish Water has announced the near completion of the sewerage replacement works at Haymarket, with 94 per cent of the new pipe installed. The remaining section at Roseberry Crescent is expected to be finished by the end of July, although further work is needed to fix problems with resurfacing on Magdala and Eglinton Crescents. The company says the work has been difficult because of the discovery of unmapped utilities – something which dogged the tram installation – and, er, old tram lines.